European Pharmaceutical Shares Slide to Four Month Lows as Trump Tariff Threat Sends Markets Tumbling

Shares in European drug companies slumped to a four-month low on Wednesday, after US President Donald Trump reiterated his intention to impose tariffs on pharmaceutical imports in a bid to encourage drug production within the United States. Markets reacted swiftly to the renewed threats, with the Stoxx Health Care index sliding by 2.8 per cent to its lowest point since April. The rhetoric surrounding these proposed measures has injected a fresh bout of uncertainty into a sector already grappling with regulatory and competitive pressures.

Bayer, one of Germany’s leading pharmaceutical firms, was among the hardest hit, with its stock price plunging by 9.9 per cent. The company had already reported a 5 per cent decline in pre-tax profit for the year’s first half, exclusive of one-off items, compounding investor unease. Other major players such as AstraZeneca and GSK saw their shares fall by 1.5 per cent and 1.7 per cent respectively, while Pfizer and Moderna, both heavily invested in mRNA vaccine technology, dropped by 3 per cent each on the New York market.

The US administration’s push for domestic pharmaceutical production comes alongside demands for deep cuts in prescription drug prices. Companies have been given a 60-day window to demonstrate reductions, marking another front in the ongoing battle over healthcare costs. At the same time, the Department of Health and Human Services, led by the vaccine sceptic Robert F Kennedy Jr, announced plans to wind down all federal contracts for mRNA-based vaccines, affecting manufacturers such as Pfizer and Moderna and further rattling sentiment in the sector.

Some pharmaceutical multinationals have begun to respond by adjusting their global strategies. AstraZeneca recently announced a $50 billion investment to bolster US production capacity and declared plans to manufacture the entirety of its US-bound drugs domestically, with only a handful of exceptions. GSK’s chief executive Emma Walmsley reaffirmed the company’s robust financial outlook and outlined intentions to invest tens of billions more into US facilities over the next five years. Roche, Novartis, Johnson and Johnson, and Eli Lilly are also increasing their American manufacturing footholds.

Meanwhile, Novo Nordisk, the Danish pharmaceutical giant behind best-selling diabetes and weight loss treatments such as Ozempic and Wegovy, experienced a 5.4 per cent decline in its share price after reporting a slowdown in sales and heavy competition. With its market value shrinking by around $100 billion in a single week, the challenges facing the firm’s new CEO, Maziar Mike Doustdar, are increasingly apparent as the company recalibrates its profit forecasts amid a shifting transatlantic landscape.

Industry observers warn that escalating tariffs risk harming both European manufacturers and US patients, with increased costs potentially being passed on to consumers and access to medicines jeopardised. European pharmaceutical leaders have condemned the prospective levies as a blunt instrument that may undermine innovation and interrupt vital supply chains at a time when global cooperation remains crucial.